Tuesday, September 28, 2010

Poverty Figures Are Bad; They Could Be Much Worse

The latest figures measuring poverty in America are quite horrifying. According to data recently released by the U.S. Census Bureau, the number of Americans living below the poverty line has reached its highest level in 51 years.

About 14.3 percent of Americans live below the poverty threshold (absurdly defined as $22,050 for a family of four) according to Census Bureau data for 2009. The official poverty rate is the highest it has been since 1994.

The economic crisis, dubbed "The Great Recession," has pushed a record number of Americans into poverty. With 44 million poor – an increase of 4 million over the previous year – the number of people in poverty has not been this high since 1959, the first year that poverty estimates were made available by the Census.

Not surprisingly, people of color are disproportionately represented in those numbers. Nearly one-quarter of blacks and Hispanics live below the poverty line. Between 2008 and 2009, the black poverty rate rose from 24.7 percent to 25.8 percent. For Hispanics, the poverty rate rose from 23.2 percent 25.3 percent. Poverty rates for non-Hispanic whites stands at 9.4 percent, up from 8.6 percent.

However, as stunning as these new figures are, the Census is dramatically underestimating the "true" poverty rate. The problem is that the method the Census uses to measure poverty is outdated.

The Census Bureau measures poverty based on a cost of living metric developed in 1955 – that's right, a metric developed 55 years ago. The Census do not take into consideration such factors as the increased cost of medical care, child care, education, transportation, and many other basic costs of living. Nor do they factor into their calculation differences in the cost of living between regions of the country – for example, living in New England is much more expensive than living in the South.

Another way in which the "true" poverty rate is underestimated is that it does not take into consideration the number of Americans who are getting by only because of government assistance. More than 20 million people received unemployment benefits at some point last year. According to the Center for Budget and Policy Priorities, unemployment benefits probably kept about 3.3 million people from slipping into poverty. Likewise, about 2.3 million people were kept from slipping into poverty because of food stamp benefits under the Supplemental Nutrition Assistance Program.

In general, large numbers of Americans are becoming increasingly dependent on government anti-poverty programs because of the recent downturn in the economy. More than 50 million Americans are on Medicaid - that's up at least 17% since the recession began in December 2007. More than 40 million people get food stamps – that's up nearly 50% since the start of the economic downturn. Close to 10 million receive unemployment insurance – that's about four times the number from three years ago. An additional 4.4 million people are on welfare – up 18% since the recession began.

For decades, conservatives have demonized our nation's social welfare system. For tens of millions of Americans, however, the social safety net is the only thing that stands between them and complete economic ruin.